Businesses looking to automate key business processes are considering two key software solutions
Enterprise resource planning (ERP) system
Customer relationship management (CRM)
ERP software supports an organization’s core business processes, such as accounting, budgeting, inventory management, supply chain management, order processing, human resource management, and payroll.
CRM helps manage the way customers interact with the business. Both software are useful tools for storing important company data and serve many departments.
- What are the key features of ERP & CRM?
- How are they different?
- Does a business need ERP CRM or both?
What is CRM?
CRM is software that manages all the ways in which a customer interacts with a business.
CRM capabilities were first developed for sales departments and were known as sales force automation (SFA).
Later, however, other systems were developed for managing customer service and managing marketing. Thus, software vendors began to combine all of these industries under a common system called customer relationship management (CRM).
The goal of CRM is to give your business a central repository of customer data, tracking all their interactions. Therefore, companies can make quick decisions for each customer but also control the effectiveness of the regular sales that follow.
For example, with a central CRM system, sales representatives will be immediately aware of their customers’ needs and will respond in a minimum of time, thus increasing customer satisfaction levels.
What is ERP?
The Enterprise Resource Planning (ERP) system evolved from Material Requirements Planning or Material Resource Planning (MRP) which was a way for businesses to understand and manage all the resources needed to run a business. successful business.
- ERP serves as a shared database across all parts of an organization. Like the economics, including
- general accounting (GL),
- accounts payable,
- accounts receivable,
- payroll and
- financial reporting.
ERP is also expanding
- in inventory management,
- in order management,
- in supply chain management.
Having a single, common database for all financial and operational data is a key advantage of an ERP system. This data collection greatly influences reporting, both static monthly reports and ad hoc. Employees also delve into financial issues easily and quickly.
Another important advantage of the ERP system is the faster financial closing of books. The financial department is obliged to issue the income and expenses the end of the month or every quarter.
In addition, closing books traditionally requires extensive manual work, data entry, and contacting different departments for financial information. However, with a central ERP system, many of these tasks are automated, and companies consume minimal time to complete them.
While the entire organization will rely on both ERP and CRM systems, the fundamental difference between them is that ERP is primarily for the financial department, while CRM is customer data used by the sales and customer service departments.
Some ERP systems include a CRM component, while others do not. CRM software systems, on the other hand, do not include ERP components.
ERP and CRM are both business applications that store and analyse data in a relational database. Both are delivered either through a traditional in-house model or through software as a service, where the vendor manages the software in its own data centre and customers access it through the cloud.
Does my company need CRM, ERP, or both?
Almost all growing small and medium-sized enterprises will need both an ERP and a CRM system or a single platform for both.
Whether a company will invest in CRM or ERP for the first time will depend on its business model. A company with a small clientele and complex financial data may be better able to invest in an ERP system first, while a company with relatively simple finances and a large customer base that requires frequent contact needs a CRM system.